(a) The terms ``administrative practice or enforcement policy''
refer to courses of conduct or policies which an agency has determined
to follow 111 in the administration and enforcement of a
statute, either generally, or with respect to specific classes of
situations. 112 Administrative practices and enforcement
policies may be set forth in statements addressed by the agency to the
public.113 Although they may be,
and frequently are, based upon decisions or views which the agency has
set forth in its regulations, orders, rulings, approvals, or
interpretations, nevertheless administrative practices and enforcement
policies differ from these forms of agency action in that such practices
or policies are not limited to matters concerned with the meaning or
legal effect of the statutes administered by the agency and may be based
wholly or in part on other considerations.
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111 The agency may have determined to follow the course
of conduct or policy for a limited time only (see paragraphs (c) and
(f), this section) or for an indefinite time (see paragraph (b), this
section), or for a period terminable by the happening of some
contingency, such as a final decision in pending litigation.
112 See United States v. Minnesota, 270 U.S. 181 (1926);
United States v. Boston & Maine R.R. Co., 279 U.S. 732 (1929); Lucas v.
American Code Co., 280 U.S. 445 (1930); Estate of Sanford v.
Commissioner of Internal Revenue, 308 U.S. 39 (1939). See also Final
Report of Attorney General's Committee on Administrative Procedure in
Government Agencies, pp. 26-29; 1 Von Baur, Federal Administrative Law
(1942), p. 474.
As to requirement that practice or policy be one with respect to a
``class of employers,'' see paragraph (g) of this section.
113 Pursuant to section 3 of the Administrative Procedure
Act, statements of general policy formulated and adopted by the agency
for the guidance of the public are published in the Federal Register. An
example is the statement of the Secretary of Labor and the Administrator
of the Wage and Hour Division, dated June 16, 1947, published in 12 FR
3915.
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(b) To illustrate this distinction, suppose the Administrator of the
Wage and Hour Division issues a general statement indicating that in his
opinion a certain class of employees come within a specified exemption
from provisions of the Fair Labor Standards Act in any workweek when
they do not engage in a substantial amount of nonexempt work. Such a
statement is an ``interpretation'' within the meaning of sections 9 and
10 of the Portal Act. Assume that at the same time, the Administrator
states that for purposes of enforcement, until further notice such an
employee will be considered as engaged in a substantial amount of
nonexempt work in any workweek when he spends in excess of a specified
percentage of his time in such nonexempt work. This latter type of
statement announces an ``administrative practice or enforcement policy''
within the meaning of sections 9 and 10 of the Portal Act.
(c) An administrative practice or enforcement policy may, under
certain circumstances be at variance with the agency's current
interpretation of the law. For example, suppose the Administrator
announces that as a result of court decisions he has changed his view as
to coverage of a certain class of employees under the Fair Labor
Standards Act. However, he may at the same time announce that in order
to give affected employers an opportunity to make the adjustments
necessary for compliance with the changed interpretation, the Wage and
Hour Division will not commence to enforce the Act on the basis of the
new interpretation until the expiration of a specified period.
(d) In the statement of the managers on the part of the House,
accompanying the report of the Conference Committee on the Portal-to-
Portal Act, it is indicated (page 16) that under sections 9 and 10 ``an
employer will be relieved from liability, in an action by an employee,
because of reliance in good faith on an administrative practice or
enforcement policy only (1) where such practice or policy was based on
the ground that an act or omission was not a violation of the (Fair
Labor Standards) Act, or (2) where a practice or policy of not enforcing
the Act with respect to acts or omissions led the employer to believe in
good faith that such acts or omissions were not violations of the Act.''
(e) The statement explaining the Conference Committee Report goes on
to say, ``However, the employer will be relieved from criminal
proceedings or injunctions brought by the United States, not only in the
cases described in the preceding paragraph, but also where the practice
or policy was such as to lead him in good faith to believe that he would
not be proceeded against by the United States.''
(f) The statement explaining the Conference Committee Report gives
the following illustrations of the above rules:
An employer will not be relieved from liability under the Fair Labor
Standards Act of 1938 to his employees (in an action by them) for the
period December 26, 1946, to March 1, 1947, if he is not exempt under
the ``Area of Production'' regulations published in the Federal Register
of December 25, 1946, notwithstanding the press release issued by the
Administrator of the Wage and Hour Division of the Department of Labor,
in which he stated that he would not enforce the Fair Labor Standards
Act of 1938 on account of acts or omissions occurring prior to March 1,
1947. On the other hand, he will, by reason of the enforcement policy
set forth in such press releases, have a good defense to a criminal
proceeding or injunction brought by the United States based on an act or
omission prior to March 1, 1947.
(g) It is to be noted that, under the language of sections 9 and 10,
an employer has a defense for good faith reliance on an administrative
practice or an enforcement policy only when such
practice or policy is ``with respect to the class of employers to which
he belonged.'' 114 Thus where an enforcement policy has been
announced pertaining to laundries and linen-supply companies serving
industrial or commercial establishments the operator of an establishment
furnishing window-washing service to industrial and commercial concerns,
who relied upon that policy in regard to his employees, has no defense
under sections 9 and 10. The enforcement policy upon which he claimed
reliance did not pertain to ``the class of employers to which he
belonged.''
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114 This provision, which appeared for the first time in
the conference bill, to which the term ``practice'' was restored after
elimination by the Senate, was apparently designed to meet some of the
objections which led to elimination of the word ``practice'' from the
bill reported by the Senate judiciary Committee. Cf. remarks of Senator
Murray, 93 Cong. Rec. 2238; remarks of Senator Johnston, 93 Cong. Rec.
2373; colloquy between Senators Lucas and Donnell, 93 Cong. Rec. 2185;
remarks of Senator McGrath, 93 Cong. Rec. 2254-2256.
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(h) Administrative practices and enforcement policies, similar to
administrative regulations, orders, rulings, approvals and
interpretations required affirmative action by an administrative
agency.115 This should not be construed as meaning that an
agency may not have administrative practices or policies to refrain from
taking certain action as well as practices or policies contemplating
positive acts of some kind.116 But before it can be
determined that an agency actually has a practice or policy to refrain
from acting, there must be evidence of its adoption by the agency
through some affirmative action establishing it as the practice or
policy of the agency.117 Suppose, for example, that shoe
factories in a particular area were not investigated by Wage and Hour
Division inspectors operating in the area. This fact would not establish
the existence of a practice or policy of the Administrator to treat the
employees of such establishments, for enforcement purposes, as not
subject to the provisions of the Fair Labor Standards Act, in the
absence of proof of some affirmative action by the Administrator
adopting such a practice or policy. A failure to inspect might be due to
any one of a number of different reasons. It might, for instance, be due
entirely to the fact that the inspectors' time was fully occupied in
inspections of other industries in the area.
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115 See Union Stockyards & Transit Co. v. United States,
308 U.S. 213, 223 (1939); and United States v. American Union Transport,
Inc., 327 U.S. 437, 454 (1946). Cf. Federal Trade Commission v. Bunte
Brothers, Inc., 312 U.S. 349, 351 (1941). See also President's message
of May 14, 1947, 93 Cong. Rec. 5281.
116 See, for example, Mintz v. Baldwin, 289 U.S. 346, 349
(1933), where the Department of Agriculture announced ``its policy for
the present is to leave the control (of Bang's disease) with the various
States.'' See also in this connection the statement of June 23, 1947, by
the Senate Committee on the Judiciary regarding the President's message
of May 14, 1947, on the Portal-to-Portal Act, 93 Cong. Rec. 5281.
117 Union Stockyards & Transit Co. v. United States,
supra. It may be noted in this connection that examples given by the
sponsors of the legislation, in discussing the terms ``administrative
practice or enforcement policy,'' involved situations in which
affirmative action had been taken by the agency. Conference Report, p.
16; 93 Cong. Rec. 2185, 2198, 4389-4391.
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(i) It was pointed out above that sections 9 and 10 do not offer a
defense to the employer who relies upon a regulation, order, ruling,
approval or interpretation which at the time of his reliance has been
rescinded, modified or determined by judicial authority to be invalid.
The same is true regarding administrative practices and enforcement
policies.118 However, a plea of a ``good faith'' defense is
not defeated by the fact that after the employer's reliance, the
practice or policy is rescinded, modified, or declared invalid.
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118 See Sec. 790.17 (h) and (i), and footnotes 111 and
112.
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